JOINT AND SEVERAL RECEIVERS OF PACIFIC BULK SHIPPING LTD v. TONG ZHENJUN AND OTHERS

HCMP 1244/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 1244 OF 2015

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D E C I S I O N
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1.  I have before me a summons dated 19 May 2015 taken out by the Joint and Several Receivers of Pacific Bulk Shipping Limited and an originating summons of the same date.  The originating summons seeks various reliefs including declarations as to the validity of the appointment of the receivers together with orders in relation to the delivery up of properties and assets including various books and records.

2.  The summons, which is classed as an inter partes summons, seeks similar relief to that contained in paragraph 3 of the originating summons. 

3.  The receivers served the summons and the originating summons on 20 May 2015 which is less than the time required for service of an inter partes summons. Consequently in their relief they seek, in addition, an abridgement of time for service. 

4.  Ms Lee, for the plaintiff, contends that it is necessary, and there is a degree of urgency, to hear this matter today because she says the receivers have no idea as to the nature of the assets over which they have been appointed under the floating charge.  She acknowledges that their appointment is challenged and has been challenged in correspondence, but what she says she seeks today is inspection of various books and records and effectively, simply an indication as to the nature of the assets of the underlying company.

5.  Mr Nip, who has recently been instructed on behalf of the defendants, contends that the court should effectively treat this application as an ex parte application on notice, and that the summons should be dismissed.  He says that there is clearly no full and frank disclosure, that there is no urgency and, amongst other things, that the current applicant is also the wrong party because the underlying company should be joined.  If I am not minded to dismiss the summons, he suggests that I should give directions to hear it.

6.  In my view it is correct that the summons should be treated as an ex parte on notice summons, that is the practice of the court where there is inadequate time to address the summons by the defendant and has been stated be the correct approach by DHCJ Mimmie Chan (as she then was) in Muginoho Co Ltd v Vimiu HK Co Ltd, unreported, HCMP 107/2012, 24 February 2012, at paragraphs 4 to 6. 

7.  In the light of that, it seems to me that, given that the defendants are in fact present in court today, it being effectively an ex parte on notice, I should be very careful as to what I say on the underlying merits of the application because anything I say is bound to be said without having had full argument on the matters which will inevitably come before the court on the inter partes summons.  In particular, there is bound to be evidence addressing the things that Mr Nip has referred to, such as that the two underlying protagonists are in fact business competitors.  

8.  Further, there is bound to be considerable arguments on the scope of section 298 of the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Cap 32, and those arguments have only been hinted at by Mr Nip and have not been addressed thoroughly by Ms Lee.

9.  I have been unable to ascertain what the urgency is in understanding the nature of the assets in the sense that I am unable to see why it is necessary to know what they are today or tomorrow as opposed to in a few weeks’ time when the summons comes on for full argument. 

10.  I recognise that the receivers contend that they simply do not know what the assets of the underlying company are because they have been denied information, but there is no suggestion or evidence of any dissipation of assets and I am unconvinced that there is an immediate urgency requiring even just a list of the assets to be passed over. 

11.  For that reason, and that reason alone, I decline to grant any interim relief of the nature which is sought.  I say nothing at all about the underlying merits of any of the other points which have been raised and I make no comment at all about the extent of any disclosure which has been made, which would be necessarily required to be a full and frank disclosure on an application of this sort.

12.  Therefore I decline to give the interim relief which is sought.  It is appropriate, however, to give directions for the resolution of the summons where all these matters can be fully and properly argued.  It does of course remain open to the receivers to take a view as to whether in fact it is better to pursue the relief they seek by way of the originating summons or whether they wish independently to pursue the inter partes summons that they have issued.

13.  Therefore I shall now deal with counsel on the proposed directions.